This column is the first of a series describing how various management approaches relate to each other and can be
developed and maintained in a singular, synthesized process. If we look at performance excellence, Six Sigma and management systems, we see that each represents a different level in the
hierarchical structure of the business process. This is best defined by considering what and where we are measuring. Performance excellence models, such as national quality
awards, have developed measurement systems that function equally well for a variety of industries, with the measures focused around a short list of critical elements. The U.S. version --the
Malcolm Baldrige National Quality Award --has seven elements, while the European version --the European Quality Award --has nine (three of which are "results"). Although the number of elements
differs slightly, the areas being measured are essentially the same. Prior to the Baldrige and the EQA, typical measures of success for quality initiatives included reject
rates, percent defective, process aim (process control) and process variability (capability). In most cases, these measures were not easily related to common measures of business success, such as
profits, time to market, cycle time and return on investment. The lack of correlation among quality and business performance measures leads to the inability of an enterprise's
senior executives to communicate effectively with operational personnel because they aren't speaking a common language. Note that Six Sigma addresses defects as defects per million opportunities,
process aim and process variability. Moreover, Six Sigma ensures that these measures relate to business results by requiring each segment of a process to define defects in readily understandable
and quantifiable terms and report on actual results demonstrated and validated as they affect the bottom line. Initially, the Baldrige criteria focused on quality results
(1988), then quality and operational results (1992), and, more recently, on business results (1995). Also, as illustrated, the number of points (on a 1,000-point scale) originally designated for
quality results was 150; since 1997, the number of points for business results has been 450. This evolution in the thinking process demonstrates that "good intentions" are
laudable, but business results are the real measures of success. These business results should be validated by the enterprise's financial/accounting operation as being measurable and demonstrated
as providing a designated net favorable result (which is referred to as "profit" in a for-profit business environment). Both the Baldrige criteria and Six Sigma emphasize
business results as critical elements, while ISO 9001:2000 doesn't even mention results. Although continual improvement and process approval have been added to the latest version of the standard,
it still doesn't address any sort of measure beyond compliance with procedures. As with performance excellence, Six Sigma and ISO 9001-based management systems are applicable
to manufacturing, research and development, service, health care, education, government and small businesses. Organizations that previously insisted that performance excellence, Six Sigma and ISO
9001 management systems weren't applicable to their fields, now recognize that government, health care, education and small enterprises can benefit from utilization of these methodologies to
their operations. Future articles in this series will explain how the various components are best developed and controlled in an integrated process that I call "Fusion
Management." About the author
Stanley A. Marash, Ph.D., is chairman and CEO of STAT-A-MATRIX Inc. E-mail smarash@qualitydigest.com . Fusion Management is a trademark
of STAT-A-MATRIX Inc. ©2001 STAT-A-MATRIX Inc. All rights reserved. |
